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The Rapid Oil Change building not being completed until 1990 will <br />reduce the first years increment by approximately $2,600. <br />Mr. Nelson, Attorney for Mr. Boosalis, correctly states that the <br />level of taxes is now fixed with completion of MGM Liquor <br />building. There was not assessment agreement because Mr. <br />Boosalis was not .receiving any tax increment dollars directly. <br />Hence, there is nothing to enforce a specific level of taxes. <br />The taxes will be determined by the assessor. <br />Financial Feasibility <br />Along with a decrease in tax increments, there have been <br />additional changes in our original estimates. Fortunately they <br />have been positive and help cover the reduction in tax <br />increments. <br />1. Reduction in interest rates in the bonds from 9.5% to 8.5%. <br />2. Reduction in improvement construction cost estimates from <br />$280,000 to $229,000. <br />Attached is a cash flow analysis prepared by Juran and Moody that <br />reflects the reduction in tax increments and interest rates. <br />Please note that the interest income from the special assessments <br />was reduced to reflect a decrease in interest rates. <br />The revised scenario would support a bond issue of $375,000 with <br />$317,500 available for project costs. <br />$375,000 Supportable Bond Issue <br />286,000 Engineer's Estimate with Sq.Ft. Cost <br />$ 89,000 Surplus <br />The total $89,000 surplus may not be realized when the bonds are <br />actually sold due to adjustments in square foot cost. The <br />important point is that there is a projected surplus if all <br />estimates hold true. <br />Additional Issues <br />1. $45,000 storm sewer cost. The Council had previously agreed <br />to not use TIF to finance this cost. <br />2. June completion for public improvements. The City may not <br />be able to make such a commitment. The completion of the <br />public improvements are dependent upon the following: <br />a. When the developer completes the rough grading. <br />b. Easements for the storm sewer off site have been <br />secured and another financing source has been approved. <br />c. The final layer of asphalt wasn't planned to be <br />installed until 1991. <br />Page 5 <br />